EdgeMarc's county assets sold in deal

Pipeline explosion led to bankruptcy

February 11, 2020 Cranberry Local News

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A natural gas production company is settling its financial troubles nearly two years after a pipeline explosion in Beaver County sent the Canonsburg oil and gas firm EdgeMarc Energy into desperate financial straits.

The company was forced into Chapter 11 bankruptcy in May after suffering financial losses from a 2018 explosion at a pipeline construction site, according to court records.

The pipeline, which goes through Butler County, was part of the Revolution system being constructed by ETC Northeast Pipeline LLC, a subsidiary of Dallas-based Energy Transfer Partners. The pipeline was the sole means for EdgeMarc to transfer its oil and methane gas from Butler County to a site in Washington County, according to documentation on the project the company made available to investors during its development.

But after the explosion, the fracking project was shut down, leading to EdgeMarc's bankruptcy filing. The process triggered a protracted legal dispute between several involved parties. On Friday, a bankruptcy court in Delaware approved a deal for a sale of EdgeMarc's assets, including the selling of its Butler County assets for $1 million to ETC. That company will enter into a new pipeline agreement for the Butler assets with Ohio-based KeyBank. The court approval allows EdgeMarc to move forward with its bankruptcy.

Neither KeyBank nor ETC returned a request for comment.

The explosion also caused the state's Department of Environmental Protection to step in with an order to restore affected streams and wetlands. According to a spokeswoman for the state's Department of Environmental Protection, work has recently begun again in that area.

The Revolution Pipeline cuts diagonally across Butler County from its northeast tip to its southeast corner as part of a 40.5-mile gas line running through Washington, Allegheny, Beaver and Butler counties. The explosion occurred in Beaver County's Center Township.

The fire reportedly died out within two hours because valves automatically cut off its fuel supply, according to a statement from Energy Transfer. The fire burned all of its fuel and went out.

The damaged line was a 24-inch gas gathering line, according to the company. The investor documents label much of the line in Butler as the same type of pipe. A legal dispute between EdgeMarc and ETC arose over who was responsible in the landslide that caused the accident.

Earlier this year, the DEP announced a $30.6 million civil penalty to ETC for violations related to the pipeline explosion and fire. The penalty is one of the largest civil penalties collected in a single settlement, according to a prepared statement from the state organization, and as part of the penalty, the DEP agreed to lift the work freeze.

“ETC's lack of oversight during construction of the Revolution Pipeline and their failure to comply with DEP's October 2018 compliance order demanded serious accountability. Their inaction led directly to this unprecedented civil penalty,” DEP Secretary Patrick McDonnell said in a prepared statement.

In its investigation into the accident, the DEP found that ETC failed to stabilize several areas along the pipeline that resulted in additional slides. It also said ETC didn't follow “hundreds of best management practice controls to address stormwater runoff,” and that the company fouled “numerous streams and wetlands” during the construction of the pipeline.

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